Do you have unfiled income tax returns, from this or any previous year? Regardless of the reason, file your tax return as soon as possible. In the best-case scenario, you could miss out on money owed to you. In the worst case, you could be on the hook for penalties and interest with the IRS.
If taxes are the last thing on your mind right now, you are in good company. With a national pandemic and the worst economic contraction in recorded U.S. history, past due taxes might not be your biggest concern. But they should not be ignored.
We can help.
Unfiled Tax Situations
If you’re required to file and owe a balance, but you can’t pay all of the tax due on your return, we may be able to help you establish a payment agreement with the IRS.
If you don’t file your return by the due date (including extensions of time to file):
- You may be subject to the failure-to-file penalty unless you have reasonable cause for your failure to file on time.
- Taxes not paid in full by the original due date of the return (regardless of extensions of time to file) may also result in the failure-to-pay penalty, unless you have reasonable cause for your failure to pay timely
- Interest is charged on taxes not paid by the original due date, even if you have an extension of time to file or pay and is also charged on penalties.
There is no penalty for unfiled income tax returns if you are due a refund. However, you risk losing a refund altogether if you file a return after the statute of limitations has expired. You must file an original return claiming a refund within 3 years of its due date to get a refund.
However, filing a return starts the statute of limitations for the IRS to assess and collect any outstanding balances. In other words, there is no statute of limitations for assessing and collecting the tax if no return has been filed.
Migration Resource Center Tax Services
The Migration Resource Center staff has a team of tax consultants, tax attorneys,
enrolled agents, and CPAs. We can assist you with reducing tax liabilities, eliminating tax disputes, negotiating IRS payments, and providing ethical tax representation and tax resolutions.
Please contact us at (646) 827-2959 or use our webform to schedule a free tax consultation.
By: Fatima Kandri, U.S. Tax Court Practitioner, October 12, 2020